Booth v. Electronic Data Systems Corp.

• Citation: 799 F. Supp. 1086
• Decision Date: 02 July 1992
• Docket Number: Civ. A. No. 91-2188-L.
• Parties: David W. BOOTH, Plaintiff, v. ELECTRONIC DATA SYSTEMS CORPORATION, Defendant.
• Court: U.S. District Court — District of Kansas

799 F. Supp. 1086

David W. BOOTH, Plaintiff, v. ELECTRONIC DATA SYSTEMS CORPORATION, Defendant.

Civ. A. No. 91-2188-L.

United States District Court, D. Kansas.

July 2, 1992.

COPYRIGHT MATERIAL OMITTED

James E. Kunce, Overland Park, Kan., for David W. Booth.

Barbara A. Harmon, Shook, Hardy & Bacon, Overland Park, Kan., John O. Sheller, Office of the Gen. Counsel, Electronic Data Systems Corp., Dallas, Tex. and Lee J. Hutton, Duvin, Cahn & Barnard, Cleveland, Ohio, for Electronic Data Systems Corp.

MEMORANDUM AND ORDER

LUNGSTRUM, District Judge.

This is an action in which plaintiff David Booth alleges that his employment was unlawfully terminated by his employer, Electronic Data Systems Corporation (EDS). The plaintiff originally alleged eight state law and two federal law claims arising from his termination.¹ Jurisdiction of the state law claims is premised upon diversity of citizenship. 28 U.S.C. § 1332. The defendant has moved for summary judgment in its favor as to all of plaintiff's claims and as to a counterclaim raised by the defendant for enforcement of a promissory note (Doc. # 27). For the reasons set forth below, the court grants the defendant's motion for summary judgment.

When considering a motion for summary judgment, the court must examine all the evidence in the light most favorable to the nonmoving party. Barber v. General Elec. Co., 648 F.2d 1272, 1276 n. 1 (10th Cir.1981). If the moving party does not bear the burden of proof at trial, it must show "that there is an absence of evidence to support the nonmoving party's case." Celotex Corp. v. Catrett, 477 U.S. 317, 325, 106 S.Ct. 2548, 2554, 91 L.Ed.2d 265 (1986).

Once the movant meets these requirements, the burden shifts to the party resisting the motion to "set forth specific facts showing that there is a genuine issue for trial." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 256, 106 S.Ct. 2505, 2514, 91 L.Ed.2d 202 (1986). The nonmovant may not merely rest on the pleadings to meet this burden. Id. Genuine factual issues must exist that "can be resolved only by a finder of fact because they may reasonably be resolved in favor of either party." Id. at 250, 106 S.Ct. at 2511; Tersiner v. Union Pacific R.R., 740 F.Supp. 1519, 1522-23 (D.Kan.1990). More than a "disfavored procedural shortcut," summary judgment is an important procedure "designed `to secure the just, speedy and inexpensive determination of every action.' Fed.R.Civ.P. 1." Celotex, 477 U.S. at 327, 106 S.Ct. at 2555.

I. FACTS

The following facts are uncontroverted for the purposes of this motion. Mr. Booth was employed by the defendant in its Systems Engineering Development (SED) program, which consists of three phases. During the first phase of the program, the employee works on client projects as a computer analyst. In the second phase, the employee receives several weeks of additional training at an EDS training facility. Before the employee enters phase two, however, he or she is required to sign a promissory note for $9,000 to protect the company's investment in the employee's education. The note must be repaid at various amounts if the employee is terminated or resigns before he or she completes three years of employment at EDS, and it is forgiven if the employee stays for longer than three years. In phase three of the program, the employee uses the training acquired during phase two on assignments for customers.

Mr. Booth signed a job application and formal employment agreement when he accepted a position at EDS. Both of these documents explicitly state that his employment was at will and that it could be terminated with or without cause at any time. Mr. Booth completed phase one of the SED program, signed a promissory note and completed his phase two training, and began phase three. After a series of disputes about his expense reimbursement requests for relocation fees incurred during the course of his employment, Mr. Booth was terminated for dishonesty and filing false expense reimbursement requests.

The plaintiff now pursues six state law claims and one federal law cause of action against EDS arising from his termination. EDS has counterclaimed for judgment on the promissory note for $9,000.00, which the plaintiff concedes he has not paid.

II. DISCUSSION

A. State Law Claims

Both parties contend that Kansas law should be applied by this court to determine the merits of the state law claims asserted by Mr. Booth. The express employment agreement entered when Mr. Booth was hired by EDS, however, as well as the promissory note he signed before beginning phase two of the SED program, contain choice of law provisions which dictate that Texas law will govern any dispute arising out of those documents. Moreover, it appears from the record before the court that these documents were executed in Texas.

This court applies Kansas choice of law provisions in diversity cases to ascertain which state's substantive law to apply. Klaxon Co. v. Stentor Electric Mfg. Co., 313 U.S. 487, 496, 61 S.Ct. 1020, 1021, 85 L.Ed. 1477 (1941). Kansas law dictates that the law of the state where the last act necessary to form a contract took place governs conflicts over the interpretation of the contract. State Farm Mutual Automobile Ins. Co. v. Baker, 14 Kan.App.2d 641, 797 P.2d 168 (1990). Therefore, the court concludes that Texas law should be applied to the claims that arise out of the employment agreement and the promissory note.

1. Wrongful Discharge Claim

In Count I of his complaint, Mr. Booth alleges that EDS breached an express and implied contract of continued employment when he was terminated. Alternatively, he argues that he is entitled to recover under a theory of promissory estoppel. He claims that EDS expressly or impliedly guaranteed him three years of continued employment because the promissory note would have been forgiven if Mr. Booth had completed three years of employment at EDS.

The employment agreement entered by Mr. Booth, however, as well as the employment application he signed and an employee handbook that he acknowledges receiving, include terms expressly indicating that he could be terminated by EDS at any time, with or without cause. Mr. Booth can point to no provision expressed by EDS to the contrary, and he admits that no one at EDS ever told him that he could only be fired for cause. Thus, EDS did not breach any express contract of employment. Moreover, the existence of an express provision covering the terms of Mr. Booth's employment precludes his claim that there was a contrary implied provision on this subject. Noble Exploration, Inc. v. Nixon Drilling Co., Inc., 794 S.W.2d 589, 592 (Tex.Ct.App.1990) (there can be no implied contract when an express contract exists covering the same term).² EDS is therefore entitled to summary judgment on Mr. Booth's wrongful discharge claims.

2. Defamation and Invasion of Privacy Claims³

The plaintiff claims that EDS made two sets of allegedly defamatory and false statements: (1) those made by EDS concerning the reason for the plaintiff's termination; and (2) EDS' disclosure to the national credit reporting system of the plaintiff's failure to pay the promissory note. To establish a viable claim of defamation, Mr. Booth must establish that EDS published statements that were both defamatory and false. Ruebke v. Globe Communications Corp., 241 Kan. 595 Syl. ¶ 2, 738 P.2d 1246 (1987). Mr. Booth's second claim of defamation, relating to the report made to national credit reporting systems by EDS, must therefore fail because there is no evidence in the record indicating that EDS disclosed information that was false. Mr. Booth does not dispute that, under the terms of the promissory note, he was obligated to repay EDS, and he admits that he has made no attempt to fulfill this obligation. His defense that the note is unenforceable as a matter of law does not undermine the truthfulness of the report made by EDS.

EDS argues that Mr. Booth's first defamation claim should be dismissed because the publication requirement has not been met. In this case it was Mr. Booth, not EDS, who published the allegedly false and defamatory reasons for his termination. Mr. Booth claims that he felt compelled to tell potential employers about the circumstances surrounding his termination from EDS during job interviews.

This type of coerced self-publication by the plaintiff may in some circumstances be imputed to the defendant. This court found in Polson v. Davis, 635 F.Supp. 1130, 1147 (D.Kan.1986) (O'Conner, C.J.), that voluntary statements to potential future employers made by the plaintiff/employee constitute publication by the defendant for purposes of sustaining a defamation claim. As the court noted, "Although a plaintiff's truly voluntary communication of a defamatory statement bars all recovery, a coerced repetition of the defamatory statement by the plaintiff has no such effect.... Under the circumstances, plaintiff was effectively coerced into repeating the accusation of `unprofessional conduct.'" Id. Mr. Booth has therefore articulated a prima facie case of defamation.

Certain communications, however, whether made by the employer or the employee to potential future employers, are protected by a qualified privilege. Kansas recognizes such a privilege "with respect to business or employment communications made in good faith and between individuals with a corresponding interest or duty in the subject matter of the communication." Turner v. Halliburton Co., 240 Kan. 1, 8, 722 P.2d 1106 (1986). This privilege exists in the context of communications by a former employer to a potential employer concerning a job applicant, id., and when an employee is coerced into voluntarily publishing allegedly defamatory comments. Roles v. Boeing Military Airplanes, No. 89-1330, slip op. at 8 (D.Kan. June 29, 1990) (1990 WL 110255), aff'd, 951 F.2d 1260 (10th Cir.1991) (Table). When such a qualified privilege exists, the plaintiff has the...